There is a statutory exempt amount (see
EIM31240) that employers can pay to
employees using their own vehicle for business travel - these
payments are known as authorised mileage allowance payments
(AMAPs). Where the total payments an employer makes do not exceed
the amount of the exempt AMAP for a given number of business miles,
dispensations will no longer be necessary. The payments are
statutorily exempt from tax and there is no requirement for the
employer to make a return to the Inland Revenue, but the employer
will still need to keep records of the payments made and business
journeys to which they relate.
Where the payments exceed the amount of the AMAP, the excess over the AMAP is automatically chargeable to tax and will not qualify for a dispensation. The employer will only need to report the excess over the AMAP.
Consequently from 6 April 2002 any dispensation, or part
dispensation, that related to payment of expenses for business
travel in an employee's own vehicle ceased.
Where a dispensation alsocovered other items these will not be affected and the rest
of the dispensation will remainin force.
These changes do not affect dispensations for business mileage payments (normally based on fuel costs) to employees with company cars.